Key insights
- Telsey raised its price target for Costco to $1,135 based on strong March sales, exceeding expectations. Comparable sales increased by 9.4%, driven by both traffic and average ticket growth. Digital sales also showed significant gains. While the stock appears overvalued based on InvestingPro data, analyst optimism is reflected in upward earnings revisions. Overall, the news is mildly bullish for Costco and potentially the broader retail sector.
Investing.com - Telsey raised its price target on Costco Wholesale (NASDAQ:COST) to $1,135 from $1,125 while maintaining an Outperform rating. The stock currently trades at a P/E ratio of 53.34, and InvestingPro data suggests the shares are overvalued relative to its Fair Value calculation, placing it among companies on the Most Overvalued list.
Costco reported a March 2026 comparable sales increase of 9.4%, exceeding Telsey’s forecast of 7.7% and the prior year’s 6.4%. Excluding gas and foreign exchange tailwinds of approximately 320 basis points, the core merchandise comp was 6.2% versus Telsey’s projection of 4.8%. The strong performance aligns with broader analyst optimism, as 18 analysts have recently revised earnings upwards for the upcoming period, according to InvestingPro Tips.
Traffic increased 1.5%, with U.S. traffic up 0.7%, while the average ticket rose 7.8%, or 4.6% excluding gas and foreign exchange. The comp included a 40 basis point negative impact from store cannibalization and a 150 basis point headwind from one fewer shopping day due to Easter timing.
Digitally-enabled comparable sales increased 23.3%, driven by gains in non-foods, product expansion including CostcoNext.com, and marketing efforts. The metric includes all sales delivered to members that are initiated through a digital device and Costco Travel.
Non-food sales comped up mid-single to high-single digits from jewelry, majors, and hardware. Food and sundries comped up low-single to mid-single digits, led by food, candy, and sundries, while fresh food comped mid-single to high-single digits, with strength in meat and bakery.
In other recent news, Costco Wholesale reported net sales of $28.41 billion for the five weeks ending April 5, marking an 11.3% increase from the same period last year. The company’s net sales for the first 31 weeks reached $173.26 billion, reflecting a 9.1% rise compared to the previous year. U.S. comparable sales for March increased by 6.2%, excluding fuel and foreign exchange, which is slightly up from February’s 6.0%. Analysts have weighed in on Costco’s performance, with Truist Securities reiterating a Hold rating and setting a price target of $977. Bernstein SocGen Group maintained an Outperform rating, emphasizing Costco’s strong membership base and effective business model. Meanwhile, Guggenheim upheld a Neutral rating, noting that rising gasoline prices are likely to benefit Costco’s financial performance. In a different sector, Freshpet received an upgrade from TD Cowen to a Buy rating, driven by better-than-expected retail sales growth of 13% year-to-date.
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